Sending tremors across China’s political landscape, President Xi Jinping and other party leaders have authorized a corruption inquiry against the powerful former head of the domestic security apparatus, Zhou Yongkang.

Until now, the highest-ranking politicians subjected to corruption inquiries were serving members of the Politburo, a rung lower than the Standing Committee in the party hierarchy.

As part of the interest rate liberalization, China still needs to lift the caps on its deposit rates. One-year swap rate has risen to 6-month high at 4.8%, while the one-year deposit rate remains at a suppressed 3%.

Turkey:

CEO of state-run lender Turkiye Halk Bankasi AS, or Halkbank, (THBIY) as well as the sons of two cabinet ministers were detained for money laundering investigations. Shares in Halkbank lost 6.7% in the morning trading. The Borsa Istanbul National 100 Index was down 2.3%. Financial Timesreports on the political background:

The backdrop to the investigation is the sharply increased tension between the Islamist-rooted AK and the movement of Fethullah Gulen, a Pennsylvania preacher which critics and even some AK party members say has infiltrated Turkey’s institutions, notably the police, judiciary and prosecutors service.

The Gulenists say they have no such agenda and no political goals, although some members concede that they are no longer Mr Erdogan’s allies after a long period in which the two forces worked together against Turkey’s old military-backed order.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. The Barrons.com Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools.